Grayscale Boosts Bitcoin ETF Team as Potential Ruling in SEC Lawsuit Nears

Grayscale Investments highlighted on Thursday that its ETF team is expanding as a widely anticipated decision in its lawsuit against the Securities and Exchange Commission (SEC) could soon be reached.

“Our ETF team is hiring,” Grayscale said on Twitter, tacking on a set of eyes emoji.

The two positions, a product specialist and senior associate to assist its ETF team, have been posted within the past week, according to LinkedIn. Combined, the recently posted positions have garnered over 50 applications.

Grayscale’s senior associate would “contribute to investment product development ideas and work with the ETF team towards their realization,” a description of the position’s responsibilities states.

The product specialist would “work closely with the sales, operations, marketing, and product teams to optimize the investor experience,” with a particular focus on ETFs, according to its description.

Grayscale took America’s financial watchdog to court last June, following the SEC’s denial to convert the Grayscale Bitcoin Trust (CBTC) into a spot Bitcoin ETF. And Bloomberg Analyst James Seyffart said on Monday that a decision in Grayscale’s lawsuit could come as soon as this week.

GBTC is an investment vehicle that allows investors to gain exposure to Bitcoin without holding the asset directly. In contrast to a spot Bitcoin ETF, which would make it cheap and easy for institutions to buy and sell Bitcoin, GBTC does not have a redemption mechanism that impacts its ability to track Bitcoin’s price and charges higher fees.

While figures like John Reed, who formerly headed the SEC’s Office of Internet Enforcement, have said chances are slim the agency approves a spot Bitcoin ETF listing, the decision in Grayscale’s lawsuit could leave the agency with no choice.

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The SEC has cited market manipulation concerns in every denial letter delivered to spot Bitcoin ETF hopefuls since 2013. If Grayscale wins its lawsuit, it could force the SEC to change its tune if a court rules the agency’s grounds for denial are insufficient.

Converting GBTC into a spot Bitcoin ETF would allow the firm to charge lower management fees and remedy a “discount” that leads GBTC shares to trade at a lower value relative to its $18 billion in Bitcoin held. The discount stems from the fund's current structure, where shares in GBTC can not be redeemed for Bitcoin.

Anticipation within crypto circles surrounding spot Bitcoin ETFs, which allow investors to gain exposure to the coin through a traditional stock exchange, has mounted since BlackRock, one of the world’s largest asset managers, put forth an application in June.

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Several other firms, including Fidelity and ARK Investment Management, have piled on with applications of their own. Last week, the SEC delayed its response to ARK’s spot Bitcoin ETF application, saying it needs more time.

If a regulatory green light from the SEC ever comes, ARK CEO Cathie Wood believes the agency will likely approve multiple applications simultaneously, echoing Grayscale’s stance. Last week, Wood said, “I think the SEC, if it’s going to approve a Bitcoin ETF, will approve more than one at once.”